Desktop demand remained weak in the first half of 2017, but is expected to start growing in the third quarter driven by new products from AMD and Intel for the gaming and high-end desktop markets, according to sources from the upstream supply chain.

AMD's new top-end 16-core Ryzen Threadripper 1950X and 12-core 1920X will become available in the retail channel on August 10, while its 8-core 1900X is scheduled to be released at the end of August.

Several vendors have already begun accepting pre-orders for desktop models using AMD's latest top-end CPU processors since the end of July including the Alienware Area-51 Threadripper from Dell.

AMD also recently announced its new Vega-based GPUs including the Radeon RX Vega 64, using either liquid or air cooling modules, and Radeon RX Vega's prices start from US$399. AMD also offers free games and discounts on hardware including Samsung's CF791 monitor as well as price-cuts on CPU/motherboard bundles to help consumers save up to US$300.

Intel has also prepared to release its next-generation 14nm Coffee Lake processors in the near future and will initially launch products such as the Core i7 8700K.

AMD and Intel are also seeing growing sales in the server ssegment. AMD's EPYC 7000 series processors were unveiled at the end of June. Although the processor series currently only accounts for less than 1% of the server market, orders for related server makers have been picking up recently and are expected to stay strong in the second half of 2017 with players including Microsoft, Baidu, Dell, Hewlett-Packard (HP), Supermicro, Inventec, Wistron, Asustek Computer, Gigabyte Technology and Tyan eagerly promoting their systems.

Intel debuted its Purley server platform in July and is currently seeing strong orders from enterprises looking to replace their existing server systems. Some market watchers believe the replacement trend will last for a whole year and shore up Intel's profitability and revenues.

The numbers in this article are really hard to jive with SIMO's eMMC performance over the past two years. In 2016 SIMO grew eMMC sales 55%, and this year they are expected to grow them 5%. The cheap Chinese phone brands are always said to be SK Hynix-SIMO customers.

The article indicates the Chinese brand in Q2 2017 grew ~39% over Q2 2016. SIMO's eMMC isn't growing anywhere close to that rate this year, although SIMO's eMMC rate was way ahead of everyone last year. Sorta mysterious.....

Chinese brands accounted for nearly half of global smartphone shipments in second quarter

Global shipments grew at 3 per cent, reaching 365 million in the period, with Chinese brands achieving a record 48

Chinese brands accounted for nearly half of global smartphone shipments in the second quarter of 2017 as they continued to expand aggressively beyond their home market, according to a report from Counterpoint Research.

Global smartphone shipments grew at 3 per cent year-on-year, reaching 365 million units in the quarter, but the growth of key Chinese smartphone brands significantly outpaced the entire industry, leading to a record 48 per cent share of shipments worldwide, a 39 per cent jump from two years ago, according to the Wednesday report.

Beijing-based Xiaomi has shown the fastest growth among top Chinese brands with its global shipments surging 60 per cent in the period, followed by Vivo’s 45 per cent and Oppo’s 33 per cent.

The growth rates of Samsung Electronics and Apple – the world’s top two smartphone brands – were at 4 and 2 per cent respectively, said Counterpoint Research.

“Chinese brands have been successful in not only cementing their positions at home, but also managing to expand beyond mainland China at the same time,” said Tarun Pathak, associate director at Counterpoint Research.

And then there's this article, that indicates demand for NAND is going up due to ..... Chinese smartphone demand. Perhaps SK Hynix-SIMO's eMMC business has lost some share to Samsung? It's hard to reconcile demand for Chinese smartphones increasing, while SIMO expects it's eMMC sales to decline sequentially as SK Hynix shifts its NAND production toward SSDs rather than mobile.

TOKYO -- Prices of semiconductor memory chips are on the rise, as shortages that began last year are exacerbated by smartphone production entering into full swing in the summer.

NAND flash memory delivery prices for manufacturers in July stood at around $3.50, up 13% from a month earlier, for the benchmark 64 gigabit, triple-level cell type used in personal computers. "We do not ship even half of the orders that come in," said the Japanese arm of Taiwanese chipmaker Transcend Information.

DRAM memory prices rose 3% on the month to about $3.10 for the standard 4Gb DDR3.

Chip supply is tightening as smartphone manufacturers ramp up production ahead of the end of the year. Up-and-coming Chinese smartphone makers like Vivo and Oppo Electronics adjusted output in the January-June period, but local shipments as well as those to emerging nations are healthy. Production looks to have recovered to previous-year levels in July.

With the growing popularity of transmitting videos and high-resolution images, China's Huawei Technologies and others are generating strong sales of smartphones equipped with higher storage capacity.

Chipmakers appear to be prioritizing shipments for smartphones, for which demand is on the rise, in turn squeezing supply for use in PCs.

Nintendo, which is seeing solid sales of its Switch game console, announced plans to boost production in July and August. Since the console uses the same DRAM chips as smartphones, the component's shortage may worsen down the line.

Higher costs for such an essential component will likely cause prices of the final product to surge. Apple's new iPhone, set for release as early as this fall, is expected to cost more than $1,000 for its top pricing model, says Yasuo Nakane, a senior analyst at Mizuho Securities. PC makers will "likely limit the frequency of discounts they offer after sales begin," according to a major domestic manufacturer.

WDC/SNDK SSD with 3D NAND and MRVL controllers with internally developed firmware.

I wonder if this is share loss for SIMO. WDC/SNDK is a SIMO SSD controller customer, but I don't know the product lines well enough to know what this is replacing.

Anybody know if this is a client or enterprise SSD? It sounds like a client SSD, which could be a SIMO controller, but isn't....

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Western Digital has started to ship its SanDisk Ultra 3D drives based on 3D TLC NAND memory. The drives, which were formally introduced nearly two months ago, are identical in terms of hardware to the WD Blue 3D NAND SATA SSD, but come in different form-factors. As for pricing, Western Digital wants the SSDs to be affordable, which is why it sells the 1 TB models at below $300, in line with competiting drives from Crucial and Mushkin.

As reported, the SanDisk Ultra 3D as well as the WD Blue 3D NAND SATA are based on the Marvell 88SS1074 controller and use Western Digital’s 64-layer BiCS 3D NAND TLC memory. The drives take advantage of Marvell’s third-generation NANDeXtend LDPC-based ECC technology, but come with proprietary firmware developed in-house. The new products made in 250 GB, 500 GB, 1 TB and 2 TB configurations, but in different form-factors: the WD Blue 3D NAND SATA SSDs come in 2.5"/7mm and M.2-2280 form-factors, whereas the SanDisk Ultra 3D SSDs are only available in 2.5"/7mm DFF packaging.

Western Digital rates its 3D TLC NAND-based drives for 1.75 million hours MTBF, which is higher than their drives featuring planar TLC memory, but a bit lower than the MTBF number offered by some competing drives. Meanwhile, the TBW ratings of the drives range from 100 TBW for the 250 GB models to 500 TBW for the 2TB models. Being a bit cautious with reliability/endurance ratings is normal because companies typically do not want elevated expectations when they deal with a new type of memory.

From performance point of view, the new SanDisk and WD-branded drives and offer up to 560 MB/s sequential read speed and up to 532 MB/s sequential write speed (when pseudo-SLC cache is used to boost write speed), which is comparable to other mainstream SATA SSDs. As for random reads and writes, we are looking at 95K IOPS and 84K IOPS, respectively, again, in line with what competing drives offer.

In the latest short position update, SIMO's short balance moved up a bit to 4.1 million shares from a previous 3.9 million.

However, the 4.1 million shares short number is from the day before they released their Q2 earnins and guidance, and the following day SIMO jumped $3.50 per share on 2.9 million shares trade. I was really surprised at that up move in the share price in the face of lousy Q3 guidance. Maybe it was shorts covering because "all the bad news is out, the good stuff is coming", or maybe not, who knows?

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Recently NAND makers MU and WDC are experiencing declining share prices despite super strong quarterly results and guidance. This happens in memory cycle peaks. So......hopefully the long awaited switch from under production to over production is taking place. When the NAND makers can't meet demand, they direct the majority of their NAND production to enterprise NAND applications since those have the highest profit margins. When NAND production is in over supply, they direct their NAND to anything that will sell, which includes SIMO's client side products, so we need NAND to enter excess production and over capacity so that the client side products get their boost in units, and SIMO's controllers sales jump as a result.

Some nuggets related to SIMO from MRVL's call. MRVL is SIMO's main merchant competitor for SSD controllers.

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We achieved this upside by stronger than expected growth of our SSD products for the enterprise and datacenter market. Our SSD business grew sequentially and now accounts for more than 25% of our storage revenue. We achieved this growth despite supply constraints in the NAND market.

We continue to believe that the storage market transition from HDD to SSD will be positive for Marvell. As an example, we estimate that our total storage sales into notebooks will grow in fiscal 2018 versus fiscal 2017 with growth in SSD sales more than offsetting the decline in HDD sales.

Storage accounted for 52% of revenue and grew 13% year-over-year, driven by the rapid revenue ramp of SSD products and our increased market presence in enterprise and the data center market with our broad HDD and SSD product portfolio.

One of your primary competitors on the SSD controller has been struggling with the ability to fully procure NAND. So, I was just hoping you could talk about the opportunity to gain share in the low-end SSD SoC market, and made some of this market dislocation going into the back half of the year.

we’ve performed very well as a company in SSD, and we have gained substantial market share, if you look and integrate back over the last year or so. So, that business continues to be on a very positive trajectory. We do view ourselves as being a very -- the broadest supplier of IP and solutions from clients, all the way to the cloud and the enterprise and the data center. As you mentioned, there is competition as some of those competitors are focused in very specific segments, some in the lower end. That’s a segment that we’re not ignoring. We have purpose-built solutions for that market and we plan to be competitive, certainly in that segment, whether its Marvell or our competitor or just in general in the market, the bulk of the NAND is not being allocated there. So, that’s just an industry issue. But we certainly intend to benefit when the overall industry re-bounce, we intend to be competitive across the span of our portfolio.

At Flash Memory Summit (FMS) this month, Silicon Motion demonstrated several of their upcoming NVMe SSD controllers and engineers presented several of the technologies Silicon Motion has developed for these controllers. Between the exhibit and the technical presentations, a total of six upcoming SSD controllers were mentioned.

Currently, most SSDs using Silicon Motion controllers feature either the SM2258 SATA controller or the SM2260 NVMe controller. The SM2258XT is a DRAMless variant of the SM2258. Silicon Motion's new SM2259 SATA controller recently debuted in the Intel SSD 545s, but hasn't been spotted in any other consumer products yet and there are still new SM2258 products being announced. Silicon Motion hasn't shared much information on the SM2259 and it doesn't even appear on their website yet, but thanks to the presentations at FMS we now know that one of the key improvements over the SM2258 is Silicon Motion's second-generation LDPC encoder. Like the SM2260 NVMe controller, the SM2259 uses a 2kb codeword size instead of the 1kb codeword size used by the SM2256 and SM2258 SATA controllers. As a result of the larger codeword size and other changes to the LDPC system, the SM2259 can offer much higher error correction throughput and tolerate a higher error rate than its predecessors. The improved performance comes at the cost of requiring significantly more die area on the controller and higher power draw, but our test results from the Intel SSD 545s indicate these tradeoffs were worthwhile.